What Will Happen If You Do Not File Your ITR Before The Deadline

March has ended, and with the income tax filing season in full swing, individuals are busy ensuring they meet their tax obligations. Amidst the hustle and bustle, it’s crucial to remember that the deadline for filing income tax returns is July 31. Missing this deadline can impact your ability to choose between the old and new tax regimes.

The Income Tax Department has set July 31 as the deadline for filing Income Tax Returns for the year 2023-24. Filing before this deadline allows taxpayers to select between the old and new tax regimes. However, failure to file by the deadline removes this choice.

But what exactly do the old and new tax regimes entail?

The new tax regime, introduced in the Budget 2020, revised tax slabs and offered taxpayers concessional rates. Opting for the new regime may mean foregoing certain exemptions and deductions, such as House Rent Allowance (HRA), Leave Travel Allowance (LTA), and various sections like 80C for investments and 80D for insurance. In contrast, the old tax regime offers over 70 exemptions and deductions, including HRA and LTA, which can significantly reduce taxable income and lower tax payments. Notably, the commonly used deduction under section 80C allows a reduction of taxable income by up to Rs 1.5 lakh.

What happens if you don’t choose a tax regime?

The government applies the new tax regime by default if no selection is made. Consequently, taxpayers forfeit the benefits of exemptions and deductions available under the old regime. To avail of exemptions on loans, investments, or other allowances, it’s advisable to file the ITR before the July 31 deadline.

And what if you miss the deadline?

Taxpayers missing the July 31 deadline for the year 2023-24 can file a belated ITR from August 1 to December 31. However, penalties will apply, and the option to choose the old tax regime will no longer be available. Tax liabilities will be calculated based on the new tax regime.

By adhering to the deadline and filing taxes on time, individuals can make informed decisions regarding their tax regime, ensuring optimal tax planning and compliance.